Using fake quotes for a Covid-19 protective shield tender and letterheads from companies that never submitted a bid — these are just some of the allegations levelled against four people accused of defrauding the Nelson Mandela Bay municipality.
The matter concerns the appointment of Luchuphe Trading.
This was made through a deviation, using the three-quote system, with the municipality requesting bids from three companies.
By allegedly falsifying two of the quotes, Luchuphe Trading was a sure bet with the cheapest bid to supply the protective shields installed at the front desks of various municipal departments.
The suspected R2.7m fraud saw suspended municipal housing boss Mvuleni Mapu back in court on Thursday, alongside Nwabisa Mtshakaza, who was the acting facilities management deputy director at the time.
They were joined by business owners Nomsa Mazibuko and Sibusisiwe Nduvane.
Not only did Luchuphe Trading win the tender, but Mapu allegedly wanted the company to charge almost three times the amount for the screens to be supplied and installed — with the company eventually failing to deliver all the items.
The four reported to the Humewood police station in Gqeberha on Thursday before appearing in court on a number of charges, including fraud, defeating the ends of justice and contravention of the Municipal Finance Management Act (MFMA).
The case has been under investigation by the Hawks since July 2021.
All four accused were released on R3,000 bail each.
Luchuphe Trading is listed as the fifth accused.
According to the charge sheet, the municipality implemented a return-to-work plan in 2020 after the first Covid-19 lockdown.
It was decided that counters that serve residents needed protective screens and Mtshakaza instructed that measurements and pricing be done by an outside company.
In June 2020, Stainless Designs assisted and found that 461 screens needed to be manufactured and installed, at a total cost of R1.025m.
When the contract went out to tender, Mtshakaza allegedly supplied Mazibuko and Nduvane with the cost supplied by Stainless Design.
Mazibuko, through Luchuphe Trading, submitted a quote just shy of R1.9m.
Nduvane, meanwhile, allegedly falsified quotes from two companies — one for R2.77m and another for R2.85m.
“The fraudulent actions of the accused caused the quotation of Luchuphe Trading to be the lowest and most favourable to receive the tender for the fitment of Covid-19 protective screens at the municipality,” the charge sheet states.
It is alleged that when Mtshakaza showed Mapu the quotes for approval, he allegedly instructed her to increase the amount by more than R877,000 before signing off on it.
Mapu was acting city manager at the time.
“The actions of Mapu, in his capacity as acting municipal manager of the municipality, were unlawful, fraudulent and in contravention of his general financial management functions in terms of 62 of the MFMA.”
In September 2020, Mtshakaza signed a delivery note for the supply and installation of 162 Covid-19 protective screens.
“The delivery note fraudulently gave out that 162 protective screens were in fact supplied and delivered,” the charge sheet says.
Mazibuko then allegedly submitted a fraudulent tax invoice amounting to R1.2m for the supply and installation of 162 screens for open-plan offices, reception desks and customer care offices.
“The amount invoiced was not in line with either the original inflated quotation presented on behalf of Luchuphe Trading to the municipality or the inflated one approved by Mapu.”
Mtshakaza signed off on the payment, but only 146 screens were installed.
The alleged fraud came to light shortly after former chief operating officer Mandla George was appointed as acting city manager and ordered the metro’s internal audit department to investigate.
After this investigation, the matter was handed over to the Hawks.
“Mtshakaza did not co-operate and after a prolonged effort from internal audit and the police to obtain her official laptop she handed over her private laptop instead in an effort to obstruct and defeat the ends of justice,” the charge sheet says.
Hawks spokesperson Captain Yolisa Mgolodela said a red flag went up when the invoice did not correspond to the quote and the matter was referred to the municipal internal auditor unit.
“The arrests and court appearance come as a result of that investigation,” she said.
A search of Companies and Intellectual Property Commission records shows that Luchuphe Trading has a registered business address in Zwide.
However, a woman at the house told The Herald the business was not operated from that address but elsewhere.
Outside the Humewood police station before heading to court, the four accused all covered their heads and faces with an assortment of hoods, scarves and face masks as members of the media tried to photograph them.
Despite covering his face, Mapu made funny hand gestures as he joked with photographers.
Standing in the dock, the accused continued to cover their heads and faces as attorney Dries Breytenbach of Gouws Attorneys read their statements for formal bail applications into the record.
State prosecutor Wilhelm de Villiers called investigating officer Warrant Officer Kanyiso Tshangana to the stand.
De Villiers said there was no objection to the accused being released on bail provided they adhered to the bail conditions set by the court.
Magistrate Nolitha Bara ordered the accused to hand in their passports.
They are each required to report to their nearest police station every Friday.
Mapu and Mtshakaza have to report to the Swartkops and Humewood police stations, respectively.
Mazibuko, who lives in East London, has to report to the Beacon Bay police station.
Nduvane, who lives in Mthatha, has to report to the Mthatha Central police station.
They are expected back in court on October 18.
None of the accused have previous convictions, however, Mapu is expected to return to court next week on charges of fraud and corruption after being arrested in August 2020.
He is accused of accepting a R900,000 bribe from his co-accused, businesswoman Bulelwa Mkwakwi Ntanga, linked to a R12m tender for a housing project in Wells Estate.
Mapu and Ntanga claimed that the payment was a gift, but the state submitted that Mapu failed to declare the money as required by the metro’s supply chain management policy. — Additional reporting by Yolanda Palezweni
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